On May 10, seven departments, including the Ministry of Civil Affairs, the National Development and Reform Commission, the Ministry of Public Security, the Ministry of Finance, the People's Bank of China, the State Administration for Market Regulation, and the State Administration of Financial Regulation, jointly issued the Guiding Opinions on Strengthening the Supervision of Advance Fees for Pension Institutions (hereinafter referred to as the "Opinions").
The Opinions will come into force on October 1, 2024 and will be valid for five years.
The "Opinions" proposes that the period of advance collection of pension service fees shall not exceed 12 months, and the deposit collected for a single elderly person shall not exceed 12 times the monthly bed fee of the elderly. The "Opinions" also proposed to encourage the use of the Internet, blockchain and other information technology means, through bank depository, insurance and other means to improve the level of capital security.
The relevant person in charge of the Department of Pension Services of the Ministry of Civil Affairs said that the Central Financial Work Conference held in October 2023 emphasized that the management industry must manage risks and strictly prevent the alienation of general commercial behaviors into illegal financial activities. By strengthening the supervision of the whole chain of collection, management, use and return of pre-collected funds, the "Opinions" will bring the charging behavior of pension institutions into the track of legalization and standardization, block the channels for illegal fund-raising by criminals under the pretext of pre-payment, and provide a strong legal guarantee for promoting the high-quality development of pension services.
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The whole chain regulates the charging behavior of pension institutions
In recent years, some pension institutions have adopted the method of pre-charging operation, which has alleviated the problems of insufficient funds for facility construction to a certain extent and relieved the operating pressure.
However, there are also a small number of pension institutions have non-standard management and use of funds, "difficult to refund" and "run away" after the capital chain is broken, and even some criminals carry out illegal fund-raising, fraud and other criminal acts, seriously damaging the legitimate rights and interests of the elderly, disrupting the order of the pension service market.
To this end, the "Opinions" focus on standardizing fees, reasonable use, safety management, and risk prevention, and tighten the "rule of law fence" of pre-charging by clarifying collection requirements, standardizing the use of use, strengthening refund management, and strengthening supervision measures during and after the event.
The "Opinions" make it clear that the fees collected in advance by pension institutions mainly include pension service fees, deposits and membership fees.
Among them, the period of advance collection of pension service fees shall not exceed 12 months, and the deposit charged to a single elderly person shall not exceed 12 times the monthly bed fee of the elderly. For pension institutions that collect membership fees to make up for the lack of funds for facility construction, the provincial-level civil affairs department may, in accordance with the principle of inclusive and prudential supervision, clarify restrictive requirements such as the maximum amount of membership fees.
In order to prevent "one bed from being sold more", the "Opinions" require that elderly care institutions shall not exceed the bed supply capacity to commit services, ensure that the total number of elderly people who pay fees shall not exceed the total number of beds on their record, and the total amount of advance fees shall not exceed their net fixed assets (the value of assets that have been subject to security interests shall not be included in the net fixed assets).
In terms of use, the Opinions propose that membership fees shall not be used for high-risk investments such as non-self-use real estate, securities, financial derivatives, etc., and shall not be directly or indirectly invested in companies whose main business is to buy and sell securities, as well as for other lending purposes; shall not invest in or donate to other enterprises under the name of its legal representative (main responsible person) or actual controller; Pension institutions that implement chain and group operation shall not invest in or donate to affiliated enterprises.
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Take multiple measures to strengthen supervision and management
In view of the deposit and membership fee with large hidden risks, on the basis of daily supervision, the "Opinions" proposes that the deposit and membership fee should be managed by means of third-party depository and risk margin of commercial banks to ensure the safety of funds.
The "Opinions" make it clear that the civil affairs department, in conjunction with the local financial regulatory department, shall determine the list of all commercial banks to undertake business and announce it to the public. Within the scope of the published list, pension institutions shall independently choose the depository bank. The special deposit account of the pension institution shall retain a certain amount of funds as a risk deposit, and the specific proportion shall be determined by the provincial civil affairs department, but the retention ratio shall not be less than 10% of the total membership fee of the account in the past three years (if it is collected for less than three years, it shall be calculated according to the total amount of membership fees collected), and shall not be less than 20% of the current balance of the account. When the balance of the special deposit account is close to the minimum proportion of risk margin, the depository bank shall give early warning to the pension institution.
In addition, the "Opinions" put forward that the depository bank should establish an account management system for pension institutions, collect information on the collection and use of funds of pension institutions, and connect with the information system of the civil affairs department.
The "Opinions" also mentioned that all localities should rely on the national pension service information system, illegal fundraising monitoring and early warning platform, etc., to explore the establishment of key risk indicator monitoring models, and regularly issue risk early warning tips. Encourage all localities to actively introduce insurance mechanisms to provide risk protection for the elderly to pay advance fees.
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Four aspects to promote implementation
The relevant person in charge of the Department of Pension Services of the Ministry of Civil Affairs said that the "Opinions" fill the gap in the regulatory system at the national level, draw a red line and set a ruler for the pre-charging behavior of pension institutions, and use open, fair and transparent regulatory rules and standards to make supervision have rules to follow and institutions to operate in good faith and compliance.
In the next step, the civil affairs department will promote the implementation of the "Opinions" from four aspects.
The first is to refine measures for benchmarking tasks. Proceed from reality, adapt measures to local conditions, highlight local characteristics and development requirements, take the lead in formulating implementation rules or corresponding management measures, and refine management requirements and specific measures.
The second is to improve the coordinated supervision mechanism. In conjunction with relevant departments, we will improve the working mechanism for the supervision of pre-charge of pension institutions, establish a communication and cooperation mechanism with the banking system, and improve the work process of pre-charge risk monitoring, early warning and abnormal reporting of pension institutions.
The third is to help institutions make a smooth transition. Set up a reasonable transition period in combination with the actual situation in the region, and guide and help pension institutions to complete the procedures for opening special deposit accounts, transferring funds, and reporting information during the transition period, so as to make good connections and preparations for the implementation of policies.
Fourth, explore innovative regulatory methods. explore and carry out dynamic assessment of the credit rating of pension institutions; Improve and implement the model text of the pension service agreement; Actively connect with insurance institutions and explore commercial insurance such as "performance bond insurance" to further reduce consumer risks.
May-June topics